Voluntary and Individual Insurance 101

One way Paychex Insurance Agency helps bring clarity to business insurance is through our Insurance 101 topics — providing business owners with quick information in plain language.

If you still have questions after reading our Insurance 101 topics, please call a licensed Paychex Insurance Agency Representative at 877-393-8868. We'll be glad to help you answer them.

What is voluntary insurance?

A voluntary benefits plan allows you to offer specific benefits for your employees at little or no cost to you. It can supplement your company's group health plan or stand on its own, and any employer contributions are purely voluntary.

What types of voluntary insurance are available?

Voluntary insurance covers a wide range of benefit options, and is often used to help employees secure individual life and disability coverage regardless of their medical historiesVoluntary benefits tend to attract fewer employees than group insurance as a whole, and those people are more likely to have a pre-existing medical condition that makes them riskier to cover. So to encourage more low-risk individuals to join the plan, insurance companies loosen the underwriting requirements for voluntary benefits policies..

Coverage options include:

• Short-Term Disability Insurance — replaces partial income for three to twenty-four months.
• Life Insurance — both termOffers level or annual death benefits and guaranteed rates, as well as level or annual premium payment periods, and is guaranteed renewable. and permanent lifeProvides an opportunity to build cash value, and coverage can last a lifetime. plans.
• Dental and Vision Insurance — two of the most popular employee coverage options.
• Accident Insurance — cash benefit in the case of a qualified accidentOn- and off-the-job accidents, or off-job-only, depending on the plan. that leaves you or an employee out of work.
• Hospital Indemnity and Critical Illness — specific coverage for cancer treatments, home health care, and other supplemental health insuranceAn indemnity-based plan with benefits payable as a lump-sum or flat benefits amount for a covered hospital stay or covered outpatient surgery..

What is individual insurance?

An individual insurance policy covers the policy holder and in some cases their family members. It can provide you with essential coverage, especially when a group insurance plan is impractical or unaffordable.

What types of individual insurance are available?

Coverage options include:

• Health — Individual health insurance helps keep rising healthcare costs in check.
• Vision
• Dental
• Long- and Short-Term Disability — Replaces partial income for 3 to 24 months for short-term disability, and from 5 years, or up to age 65 for long-term disability insurance.
• Life Insurance — both termOffers level or annual death benefits and guaranteed rates, as well as level or annual premium payment periods, and is guaranteed renewable. and permanent lifePProvides an opportunity to build cash value, and coverage can last a lifetime. plans.
• Property and Casualty Insurance — Property and casualty insurance includes homeowner's, auto, personal liability, and other related policies.

What is the difference between voluntary and individual insurance?

While these types of insurance offer similar coverage options, voluntary insurance is employer sponsored and offered to all employees through payroll deductions, while individual insurance policies are purchased by an employer or employees on a case-by-case basis.

For more about the differences between voluntary and individual insurance, please call a licensed Paychex Insurance Agency Representative at 877-393-8868.

What is the difference between group and individual insurance?
	Group Insurance	Individual Insurance
Covers Employer
Covers Employers' DependantsStarting September, 2010, insurance coverage for dependent children must be provided up to the age of 26 under group and individual policies.
Covers Employees
Limited Coverage AmountsStarting September, 2010, the healthcare reform law will prohibit lifetime limits on coverage. In 2011, it will prohibit lifetime limits on the dollar value of coverage.
Annual LimitsStarting September, 2010, the healthcare reform law will tightly restrict new plans’ use of annual limits.
Helps Employees Secure Health Insurance Regardless of Medical HistoryIn September, 2010, health plans will no longer be able to drop people from coverage when they get sick, or deny coverage to children under the age of 19 with preexisting conditions. In 2014, that prohibition will extend to everyone.
Paid for by EmployerThe employer decides the percentage of contributions.
Eligible for Tax CreditsBusinesses with fewer than 25 employees and average annual wages of less than $50,000 that provide health insurance receive tax credits based on a sliding scale.
Paid for by EmployeesThe percentage of insurance costs paid by employees is determined by the employer
For more about the differences between group and individual insurance, please call a licensed Paychex Insurance Agency Representative at 877-393-8868.

Should you choose group or individual health insurance?

Unless you are the only employee at your business, the question of whether to choose an individual or group health insurance plan can be a complicated one.

Ask yourself these seven questions, then talk with a licensed Paychex Insurance Agency Representative at 877-393-8868 to find out more about your options.

1. Are you looking to insure your employees, or primarily yourself and your family?
2. Have you ever been declined for insurance coverage?
3. If you already have group insurance, how long have you offered it?
4. How many employees are eligibleThe term "Eligible" refers to the class or category of employees that will be offered the insurance. This is up to the employer. for coverage?
5. Will you have at least 75 percentIn most cases 75% of your eligible employees must enroll in a group plan (or be enrolled in another group plan). participation?
6. Will you contribute at least 50 percent50% refers to the percent of premium the employer must commit to paying in order to offer group health insurance. of the cost?
7. If you're re-evaluating a current group insurance plan, is your main goal cost savings or improved benefit offerings?

How much coverage do you need?

Depending on the type of plan, it can be difficult to determine the right amount of coverage for yourself, your business, and your employees.

Our licensed insurance representatives are well versed on the many types of insurance we offer, and can discuss your options based on your personal and professional situation. Call 877-393-8868 for the information to decide how much coverage you really need.

Where can you find an individual insurance quote?

You can view general quotes and plan comparisons through eHealthInsurance. We recommend that you then call us at 877-393-8868 for a more detailed look at your options, quotes, and underwriting requirementsCarriers will evaluate certain information to determine whether you are classified as a standard or sub-standard risk. This has a direct positive or negative effect on your insurance premium. courtesy of a licensed Paychex Insurance Agency Representative.

How can Paychex Insurance Agency help you find a plan that fits your needs?

Our licensed representatives assess your current situation and help determine your true insurance needs, so you can choose the right plan without paying for coverage you don't need. Because premiums can easily vary by as much as 300%, they'll discuss your plan options from among our highly rated insurance carrier partners to help you determine which plan is the best fit for your needs and budget.

How can an employee get voluntary insurance added to your company's benefits package?

Your employees can ask you to offer specific voluntary benefits based on their needs, or you can determine which plans you offer. Each employee can then decide on their own whether to participate in one or more of the available plans.

back to top